The FTSE has not been immune to the global equity markets selloff, and heads towards the close down 0.25%.
UK markets
----------------
Once again the mining sector continues to be a millstone around the neck of the FTSE, as it has done its best to drag the index lower. This has been compounded by the selloff in US equities. GlaxsoSmithKline has announced US authorities have given the green light to earlier-than-expected human trials for its Ebola vaccine drug. This is an encouraging occasion where common sense appears to have prevailed, as the World Health Organisation previously warned that the true number of those exposed to Ebola may be in the tens of thousands. Even though CSR has rejected an initial offer from Microchip Technology, the shares remain up over 34% on the day as both parties asses their positions. Shares in the UK-based CSR has been subdued of late but, being well-placed to take advantage of the shifting trends of connectivity, it will be reluctant to sell itself short. Aggressive institutional downgrades to Ocado's share price has seen the struggling food retail distributor's shares drop by over 13% on the day, ironically at the same time as WM Morrisons remains one of the FTSE's highest climbers.
US markets
------------
Self confidence in tackling large physiological hurdles has never previously been an issue for US investors but, having popped above 2,000 on the S&P, a distinct 'risk off' mentality has grasped traders. Of course with this being a long weekend due to Labor Day on Monday seeing US markets shut, this could be more of a case of good old fashioned profit taking. This afternoon has also seen US preliminary quarterly GDP figures beat expectations with its biggest quarterly rise since the Q1 2010. This should also go some way towards wiping out the memory of last quarter's contraction - an isolated anomaly in an otherwise perfect four-year run. Ahead of its IPO launch, Alibaba has posted first-quarter profits that have tripled. However, with the acquisition of 26 companies for $16 billion, uncertainty surrounds the company. The question remains, is it buying this profitability or is it from growth in its existing operations? The IG grey market continues to value the Chinese giant at over $200 billion.
Commodities
-----------
Gold bugs look to be in a pre-emptive mood at the moment as the minor rally in the precious metal's price continues for a third day in a row. History would certainly appear to be on their side as over the last couple of decades September has regularly proven to be gold's most profitable month of the year. Of course, with the topic of interest rate rises never far from traders' minds, the lack of any income generated from investing in the precious metal could quickly turn that bullish sentiment.
FX
------------
The US dollar's comparative strength against both the euro and the pound continues to hog the limelight. Efforts from GBP/USD traders to bounce back above the $1.66 level have so far proven to be fruitless. The absence of encouraging words from the Bank of England is partially to blame for the market's lack of confidence. Things across the channel are even worse as this morning's inflation figures out of Germany have done nothing to assuage fears that tomorrow's figures from the eurozone will drop to just 0.3%. Should this come to pass, it will bring into sharp focus the very real threat of deflation and pile even more pressure on the ECB to act.
UK markets
----------------
Once again the mining sector continues to be a millstone around the neck of the FTSE, as it has done its best to drag the index lower. This has been compounded by the selloff in US equities. GlaxsoSmithKline has announced US authorities have given the green light to earlier-than-expected human trials for its Ebola vaccine drug. This is an encouraging occasion where common sense appears to have prevailed, as the World Health Organisation previously warned that the true number of those exposed to Ebola may be in the tens of thousands. Even though CSR has rejected an initial offer from Microchip Technology, the shares remain up over 34% on the day as both parties asses their positions. Shares in the UK-based CSR has been subdued of late but, being well-placed to take advantage of the shifting trends of connectivity, it will be reluctant to sell itself short. Aggressive institutional downgrades to Ocado's share price has seen the struggling food retail distributor's shares drop by over 13% on the day, ironically at the same time as WM Morrisons remains one of the FTSE's highest climbers.
US markets
------------
Self confidence in tackling large physiological hurdles has never previously been an issue for US investors but, having popped above 2,000 on the S&P, a distinct 'risk off' mentality has grasped traders. Of course with this being a long weekend due to Labor Day on Monday seeing US markets shut, this could be more of a case of good old fashioned profit taking. This afternoon has also seen US preliminary quarterly GDP figures beat expectations with its biggest quarterly rise since the Q1 2010. This should also go some way towards wiping out the memory of last quarter's contraction - an isolated anomaly in an otherwise perfect four-year run. Ahead of its IPO launch, Alibaba has posted first-quarter profits that have tripled. However, with the acquisition of 26 companies for $16 billion, uncertainty surrounds the company. The question remains, is it buying this profitability or is it from growth in its existing operations? The IG grey market continues to value the Chinese giant at over $200 billion.
Commodities
-----------
Gold bugs look to be in a pre-emptive mood at the moment as the minor rally in the precious metal's price continues for a third day in a row. History would certainly appear to be on their side as over the last couple of decades September has regularly proven to be gold's most profitable month of the year. Of course, with the topic of interest rate rises never far from traders' minds, the lack of any income generated from investing in the precious metal could quickly turn that bullish sentiment.
FX
------------
The US dollar's comparative strength against both the euro and the pound continues to hog the limelight. Efforts from GBP/USD traders to bounce back above the $1.66 level have so far proven to be fruitless. The absence of encouraging words from the Bank of England is partially to blame for the market's lack of confidence. Things across the channel are even worse as this morning's inflation figures out of Germany have done nothing to assuage fears that tomorrow's figures from the eurozone will drop to just 0.3%. Should this come to pass, it will bring into sharp focus the very real threat of deflation and pile even more pressure on the ECB to act.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
AUD/USD remains firm above 0.6600 ahead of RBA
AUD/USD maintains its bullish bias well and sound on Monday, extending the multi-session recovery past the 0.6600 barrier ahead of the key interest rate decision by the RBA.
EUR/USD propped up near 1.0750 ahead of European Retail Sales
EUR/USD churned around 1.0770 to kick off the new trading week, with the pair rising after better-than-expected Purchasing Managers Index figures early Monday before settling into familiar chart territory above 1.0750 ahead of Tuesday’s pan-European Retail Sales figures.
Gold holds on to modest gains around $2,320
Gold trades decisively higher on the day above $2,320 in the American session. Retreating US Treasury bond yields after weaker-than-expected US employment data and escalating geopolitical tensions help XAU/USD stretch higher.
Bitcoin price holds above $63K as MicroStrategy tops BTC ownership list
Bitcoin (BTC) price recorded a rather bold two days this past weekend in a surge that saw millions in positions liquidated. However, the week is off to a calm start with altcoins sucking liquidity from the BTC market.
Stagflation warning: Service economy contracts as prices rise
In another stagflation warning sign, the U.S. service sector contracted in April even as service prices rose. The Institute for Supply Management's non-manufacturing PMI dropped to 49.4 in April, dipping from 51.4 in March.